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Shanghai shares drop by noon as rate cut hints economy is weak
By Ye Zhen |
July 6, 2012, Friday
|
Online Edition
Online Edition
SHANGHAI shares fell this morning on concern the nation's economic growth is weaker than expected, overshadowing the central bank's second interest rate cut in one month.
The key Shanghai Composite Index fell 0.48 percent to 2,190.71 points. Turnover was 33.1 billion yuan (US$5.3 billion) by midday.
The People's Bank of China, China's central bank, yesterday evening cut the one-year deposit rate by 25 basis points to 3 percent and the one-year lending interest rate by 31 basis points to 6 percent, effective today.
The central bank also allowed banks to cut lending rates to as low as 70 percent of the benchmark rate, compared with the previous 80 percent.
"The second cut in one month indicates the economic growth in second quarter may be slower than authorities' expectations," Lu Zhengwei, chief economist of Industrial Bank, published on his Weibo.com account as his usual practice to express his opinions. "We expect GDP growth in second quarter may have dropped to 7.6 percent." A reading of 7.6 percent would be the lowest since first quarter of 2009.
China's statistics authority is scheduled to announce key second quarter economic data at 10 am next Friday.
Lenders traded bearish in the morning session. The Industrial and Commercial Bank of China Ltd, the nation's largest lender, lost 1 percent to 3.91 yuan. China Construction Bank Corporation fell 1.4 percent to 4.13 yuan. Agricultural Bank of China retreated 0.8 percent to 2.55 yuan.
Insurers also fell. China Life Insurance, the country's biggest insurer, lost 1.6 percent to 18.57 yuan. China Pacific Insurance (Group) Co edged down 0.6 percent to 22.30 yuan. While Ping An Insurance Co, China's second largest insurer, added 0.1 percent to 45.41 yuan.
Most property developers gained. China Vanke, the nation's biggest developer, rose 1.7 percent to 9.45 yuan. Poly Real Estate, the second largest developer, added 2.5 percent to 12.52 yuan. Gemdale Corporation jumped 3.5 percent to 6.79 yuan.
The key Shanghai Composite Index fell 0.48 percent to 2,190.71 points. Turnover was 33.1 billion yuan (US$5.3 billion) by midday.
The People's Bank of China, China's central bank, yesterday evening cut the one-year deposit rate by 25 basis points to 3 percent and the one-year lending interest rate by 31 basis points to 6 percent, effective today.
The central bank also allowed banks to cut lending rates to as low as 70 percent of the benchmark rate, compared with the previous 80 percent.
"The second cut in one month indicates the economic growth in second quarter may be slower than authorities' expectations," Lu Zhengwei, chief economist of Industrial Bank, published on his Weibo.com account as his usual practice to express his opinions. "We expect GDP growth in second quarter may have dropped to 7.6 percent." A reading of 7.6 percent would be the lowest since first quarter of 2009.
China's statistics authority is scheduled to announce key second quarter economic data at 10 am next Friday.
Lenders traded bearish in the morning session. The Industrial and Commercial Bank of China Ltd, the nation's largest lender, lost 1 percent to 3.91 yuan. China Construction Bank Corporation fell 1.4 percent to 4.13 yuan. Agricultural Bank of China retreated 0.8 percent to 2.55 yuan.
Insurers also fell. China Life Insurance, the country's biggest insurer, lost 1.6 percent to 18.57 yuan. China Pacific Insurance (Group) Co edged down 0.6 percent to 22.30 yuan. While Ping An Insurance Co, China's second largest insurer, added 0.1 percent to 45.41 yuan.
Most property developers gained. China Vanke, the nation's biggest developer, rose 1.7 percent to 9.45 yuan. Poly Real Estate, the second largest developer, added 2.5 percent to 12.52 yuan. Gemdale Corporation jumped 3.5 percent to 6.79 yuan.
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